Strategic Management essay

Thought they provide lowest cost but they can still operating profits. Eurasia was established in 1993 and it was started operations on the 18 November 1 996. Initially, Eurasia has set up a government owned company, it’s named DRY-WHICH. Then Tony Fernando bought the company liabilities in 8 September 2001 and estimation ARMS million debts. Eurasia has rapidly successful developed into the cheapest and largest airline since 2001. Figure 1: Tourists used Eurasia Airline 1. 1 Vision Eurasia want to be the bottom price airline in Malaysia with provide high quality service to people. 1. 2 Mission

All employees of Eurasia same like a big family work together and growing together. Become a well-know company for SEAN brand Everyone can fly with Eurasia 1. 3 Goal Become a regular pattern of low fares. 1. 4 Objectives Eurasia has used some strategies to achieve a regular pattern of low fares. Another objective include: high aircraft utilization, safety first, low fare, streamline operations, lean distribution system and point to point network. 2. 0 Raisin’s Competitors The competitors of Eurasia are Malaysia Airline System Bertha (MASS), Urinary Holdings, Asset, Singapore airlines Limited, Southwest Airlines, Thai Airways

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International and Melinda Airways. MASS are the main competitor of Eurasia. Both are operating flights in domestic and international. But MASS provide the aircraft with various types of comfortable seats consist of first class, business class and economic class. And Eurasia only provides planes with narrow seat and single class. Moreover, MASS is the full service airline which provides premium services to the passengers. Therefore, Eurasia is rebinding as low cost carrier to provide the passengers low fare in order to compete to its competitors. 3. 0 The Industry in General Nowadays, airline industry becomes a fierce industry.

In Malaysia, it is being dominated by main operators which are Eurasia and MASS . Eurasia was recognized for better in price, publicity and word of mouth. However, MASS was recognized for tangibles, core service, reputation and employee. Before 2001 , Eurasia was not succeeding to create its own niche market which Eurasia unsuccessfully to stimulate the market and attract the passengers from MASS. By 2001 , Eurasia was bought by Tony Fernando and rebinding to transform their carrier into low cost carrier. By 2009, Eurasia successfully grew to 79 aircraft and reach 1 1. Million passenger. Eurasia had made a sharp increase in its profitability by 201 3 and now, Eurasia has been the leader of low cost carrier in Asia. 4. 0 Strategy issues Indian’s population is an attraction to overseas organization. In year to 2013, Eurasia has planned to expand market to India. However, to protect local airlines, India government only allowed foreign airlines to join venture with local airlines. Eurasia has planned to join venture with Tats and Tellers group (Indian’s airlines). Eurasia will hold 49% share from it, the maximum amount of share of laws.

Before it, Eurasia had submitted proposal to ministry of civil aviation and obtain non-objection certificate (NCO). Then obtain air operation permit from Directorate General of Civil Aviation (GAGA). Unfortunately, Eurasia still face procedure issues with NCO, company, finance and director background, safety, and etc will be check during the procedure. But, Foreign Investment Promotion Board (FIB) has given cleared to Eurasia proposal. Tony plan manage Eurasia India by Malaysia Company in Achaean, because Achaean are the next destination to expand their market. 5. Strategic Analysis 5. 1 STOW Analysis (Internal Environmental Analysis) Strengths Strong management team Eurasia has a strong management team with strong connected with airline industry and governments. Since, Eurasia executive management teams which buildup of the expert in the industry and ex-top government official who has good relationship with government. Strong and popular brand name in market Eurasia is well-known among the world. It also becomes low cost leader in Asia. Eurasia was also able to penetrate the potential market. It creates a slogan “Now Everyone Can FM’.

The result of providing budget and low fare to consumer effectively bring their brand more famous in airline industry. Weaknesses Lack of own maintenance, overhaul and repair facility Eurasia currently has over 100 planes in Malaysia, Thailand and Indonesia. It can be predicted that is about another 1 00 planes in the next few years will be received. Therefore, Eurasia must get a proper maintenance of their planes which will also benefit to reduce overall cost. It is a competitive disadvantage for Eurasia if not own its overhaul and maintenance facility.

Complaints from customers There are many complaints by customers all around the world. Eurasia need to improve their service to satisfy customers’ needs. Most of customer’s implants that the flight always delays, being charged for a lot of unnecessary things, and cannot change the flight if customer could not make it. Opportunities Partner with other low cost airline Eurasia can take an opportunity to corporate with other low cost airline. Eurasia can get some benefits, competitive advantage or strengths from other airline company such as: brands name, skill of the time to landing.

Increase fuel prices will squeeze out unprofitable competitors High fuel price may look like a treat for Eurasia. But being a low cost leader, Eurasia is able to control the price to the lowest among all airlines. Thus, Eurasia has an opportunity to kick out the entire unprofitable competitor that not able to afford expensive fuel. The reads Full service airlines planning to cut costs Most of the full service airlines have started to cut their cost and compete with Eurasia. This will reduce the profit margin of Eurasia when competitors exist in the market.

For example, Tiger Airways at Singapore Airlines Rates charges to Eurasia Security charges, airport departure charges and landing charges are all control by airline operators and it is consider as a treat to Eurasia. For example, Singapore Airport charge 21 SAG for every single person departs room Singapore. 5. 2 Pest/Pestle Analysis (External Environment Analysis) Political Government is playing an important role in influencing business of Eurasia- The major bases of Eurasia which are Malaysia, Thailand and Indonesia have an uncertainty political. Eurasia was affect by this three countries when change Of government or elections.

For example, Thailand has political uncertainty. It causes the airport force to close because of the demonstrations and unrest remains. Economic Economic is one of the environmental factors that affect the business of Eurasia. The global crisis has affected Eurasia business. This is due to the cultural aspects that majority of people less credit. But, Eurasia which provide low cost fare will attract more people when economy slowing down, this is because more people tend to buy cheap ticket at that situation. Social The main issue of Eurasia will concentrate is about the arbitration of the populations.

Countries like China, India are creating large middle-classes within their countries. This market is a good opportunity for Eurasia in the future, because the more people employed in the cities, the more need the ticket for a journey to their home country. Technological The advance of new technology helps Eurasia to gain competitive advantage. Eurasia has provides online service which is online ticketing online hotel booking, travel insurance and also car hire. Eurasia also provides SMS booking book seats, and check schedules through mobile phones. The use of technology help Eurasia reduced operating cost by no need hire ticket agents. . 3 PORTER’S FIVE FORCES The threat of new entrants High capital requirement The threat of new entrant is affect the ability of new competitor to enter the market, The threat of new entrant of Eurasia is moderate because the airline industry needs high capital to start up their business so it prevents many entrants because of the reason. Customer has little brand loyalty Eurasia had put a lot of effort to positioning their service and product to their customers. New competitors who want to come in the industry have to put effort to compete with Eurasia. However, full service competitor may become a threat to Eurasia in long term.

The power of buyers Consumers have access to market information The buyer’s power is high because potential customers have access the market information to searching price through internet. In order, customers an easily search their cheaper prices. Low switching cost Switching cost to other airline is low so that customer bargaining power is strong. There are many low cost airlines in Asia and customers will choose the airline which flight schedule fit their convenience The power of suppliers High switching cost The supplier of aircraft is either Airbus or Boeing Company.

Most of the Raisin’s aircraft are supply by Airbus Company. If Eurasia want switch to Boeing, the cost will be high because it must provide training cost for staffs to suit the aircraft features. Thus, the bargaining power of supplier is high. Lack f importance of buyers to supplier Airbus is a company which has many customers come around the world. Eurasia had been ordered 200 aircraft but only 54 aircraft had been delivered. The fact show that Eurasia is not considering as an important buyer to Airbus. So, Airbus got strong power toward Eurasia.

The threat of substitutes Performance of substitutes There is no obvious product differentiation within other airline with Eurasia and the performance among the airlines also quiet similar. So the threat of substitutes is moderate. Relative price The prices within other airlines and Eurasia are about the same. Some airlines are offer cheaper price but have to depend on the time gap of the booking date and flight date. The competitive rivalry High numbers of rivals Eurasia has to compete with 59 low fares and no frills airlines. Among of them are Strata Airways, Tiger Airways, Air Arabia and so on.

The more competitors in the market will cause the market competitive. Products and services are similar The services and products provides by airlines are similar to customer. So they are competing about the pricing. But Eurasia has other services like tour packages and hotel booking; it is more option for customer. The industry will consists of highly competitive if the similar products exist in the market. Figure 2: Porter’s Five Forces diagram 6. 0 Recommendations Eurasia must provide better services for passengers that choose to use their airline services.

Eurasia must prove to the world especially India that they can give their customers the better set-vice compared to other airline company. They must gain local people’s trust and confident in many aspect such as service, safety and so on. To gain customers trust and confident, Eurasia should improve their reputation and solve the complaints from their assenter such as the often of delayed flight, unnecessary charges and also difficulties to change flight. Secondly, Eurasia should increase their technology and maintenance team so that the customers will choose Eurasia compared to other airline.

Normally, customers will choose airline service that provides the best quality and standard technology. The first thing that they will consider to fly with airline is safety. Thus, Eurasia must improve their technology so that they can make customers feel safe to fly with them. It is useful when Eurasia can enhance the service and technology. It is good to roved statements to their joint venture company to let them believe that Eurasia is a good airline company and has the ability to provide better service than other airline company.

It can solve the procedure problem faced by Eurasia when joint venture with India airline. 7. 0 Conclusions Eurasia is a well know Airline Company in the world. It is proved that this airline company has provided best services and lowest price to customers but at the same time the company still received the same complaints from the customers about their services. Thus, Eurasia should increase their services’ standard to recover the complaints from the customers. It is very important if Eurasia want to get more royal customers. 8. 0 References Websites Eurasia Introduction.